Cash Out Refi to Buy First Investment Property. Good or bad idea?

[James Lott]

I was recently having a conversation with someone who is thinking about buying her first investment property to buy and hold. She bought her home for 155k in 2011 and owes about 100k on it currently. Recent comps in her area have sold for just over 300k. She is thinking that at this point she wants to use the cash from a re-finance to buy a property in the 100k-200k range. What are some things she might want to consider before making a decision like this?